JGBs slip as investors remain cautious ahead of CPI data, unemployment rate

The Japanese government bonds slipped Thursday as investors remained cautious ahead of the country’s core consumer price inflation for the month of May, scheduled to be released on June 30. In addition, the unemployment rate for the month of May, due on the same day will add further direction to the bond market.

The benchmark 10-year bond yield, which moves inversely to its price, rose nearly 1 basis point to 0.06 percent, the long-term 30-year bond yields hovered around 0.82 percent and the yield on the short-term 2-year note traded nearly 1/2 basis point higher at -0.12 percent by 06:10 GMT.

Japan’s headline CPI is forecast to have edged up 0.1ppt to a six-month high of 0.5 percent y/y. Other May data due on Friday include May’s preliminary IP figures, which are expected to show a drop of 3.0 percent m/m, following the 4.0 percent m/m rise in April.

On the flip side, Japan’s retail sales growth slowed in May compared to last year, signalling that consumers are still reluctant to open their wallets. Retail sales rose 2 percent in May from a year ago (forecast +2.6 percent), after rising 3.2 percent in the previous month.

Meanwhile, Japan’s Nikkei 225 closed 0.45 percent higher at 20,220.30, while at 06:00GMT and the FxWirePro's Hourly Yen Strength Index remained slightly bearish at -90.63 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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